H1 2019 ROADSHOW PRESENTATION Paris 1 October 2019 SAFE HARBOUR - - PowerPoint PPT Presentation

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H1 2019 ROADSHOW PRESENTATION Paris 1 October 2019 SAFE HARBOUR - - PowerPoint PPT Presentation

H1 2019 ROADSHOW PRESENTATION Paris 1 October 2019 SAFE HARBOUR STATEMENT DISCLAIMER This presentation includes forward- looking statements. Words such as anticipates, believes, estimates, expects, intends,


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SLIDE 1

Paris 1 October 2019

H1 2019 ROADSHOW PRESENTATION

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SLIDE 2

SAFE HARBOUR STATEMENT

DISCLAIMER

This presentation includes forward-looking statements. Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to:

  • Changes in general economic, political or market conditions, including the cyclical nature of some of Airbus’ businesses;
  • Significant disruptions in air travel (including as a result of terrorist attacks);
  • Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar;
  • The successful execution of internal performance plans, including cost reduction and productivity efforts;
  • Product performance risks, as well as programme development and management risks;
  • Customer, supplier and subcontractor performance or contract negotiations, including financing issues;
  • Competition and consolidation in the aerospace and defence industry;
  • Significant collective bargaining labour disputes;
  • The outcome of political and legal processes including the availability of government financing for certain programmes and the size of

defence and space procurement budgets;

  • Research and development costs in connection with new products;
  • Legal, financial and governmental risks related to international transactions;
  • Legal and investigatory proceedings and other economic, political and technological risks and uncertainties.

As a result, Airbus’ actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see the 2018 Airbus SE Registration Document dated 29 July 2019, including the Risk Factors section. Any forward-looking statement contained in this presentation speaks as of the date of this presentation. Airbus undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise. Rounding disclaimer: Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

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SLIDE 3

AIRBUS AT A GLANCE – AS OF FY18

Passenger Aircraft, Freighter Conversion, Services Civil / Parapublic and Military Helicopters for a wide range of missions, Support and Services Military Aircraft, Space Systems, Comms, Intelligence and Security, Unmanned Aerial Systems

Airbus Helicopters Defence and Space

3

Consolidated Airbus

External Revenue by Division

€ 63.7 bn

t/o defence € 9.9 bn

Airbus Helicopters Defence and Space 74% 9% 17%

Deliveries by Programme (units)

A320 78% A350 12% A330 6% A220 3% A380 1%

External Revenue Split

Platforms 59% Services 41%

External Revenue Split

Platforms 70% Services 30%

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SLIDE 4

H1 2019 HIGHLIGHTS

Robust commercial aircraft environment H1 2019 financials mainly reflect A320 ramp-up and neo transition Focus on securing FY deliveries, which remains challenging On that basis, 2019 Guidance maintained

4

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SLIDE 5

H1 2019 COMMERCIAL POSITIONING

5 AIRBUS: 213 gross orders, incl. 151 new orders at Le Bourget. 88 net orders. Backlog: 7,276 a/c HELICOPTERS: 123 net orders incl. 23 NH90 and 11 H145 in Q2 DEFENCE AND SPACE: Order intake € 4.2 bn, incl. A400M DIRCM for German Air Force and Global Support Step 2. Key contract win in Space

€ 30.9 bn

t/o defence € 4.1 bn

Airbus 77% Helicopters 7% Defence and Space 16%

H1 2019 Airbus (in units) Order Intake (net) 88 Order Book 7,276 Helicopters (in units) Order Intake (net) 123 Order Book 697 Defence and Space (in € m) Order Intake (net) 4,220

Consolidated Airbus External Revenue

by Division

Consolidated Airbus Order Book

by Division

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SLIDE 6

Market Demand Product Positioning H1 2019 Review

H1 2019 ROADSHOW PRESENTATION

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SLIDE 7

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A ROBUST COMMERCIAL AIRCRAFT ENVIRONMENT

Notes: Passenger aircraft (≥100seats), Freighters (>10t) | Rounded figures to nearest 10 Source: Airbus GMF 2019 Box sizes for illustrative purposes only

25,000

Grow

14,210

Replace

2019

22,680

Fleet in service

8,470

Stay

2038

39,210

Deliveries

~39k

New deliveries

4.3%

annual growth Strong & Resilient passenger traffic growth: ~40% of deliveries for replacement, ~60% for growth

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SLIDE 8

LONG-TERM GROWTH FUELLED BY MIDDLE-CLASS EXPANSION IN EMERGING ECONOMIES

8

2018 trips per capita

Source: Sabre, IHS Markit, Airbus GMF 2019 Equivalent amount of passengers flying from/to/within the country

2018 real GDP per capita

(2015 $US thousands at Purchasing Power Parity)

0.01 0.1 1 10 100 50 100 150 200 250

Africa Asia/Pacific CIS Europe Latin America Middle East North America

Bubble size proportional to population

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SLIDE 9

Market Demand Product Positioning H1 2019 Review

H1 2019 ROADSHOW PRESENTATION

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SLIDE 10

COMPETITIVE AIRCRAFT PORTFOLIO UNDERPINS RECORD BACKLOG

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* Commercial aircraft 8% of undisclosed customers

Airbus backlog* aligned with regional needs and demand forecast

% Backlog as of end of June 2019 % Share of 2019-2038 new deliveries (GMF 2019)

Solid and well diversified Backlog* 7,276 aircraft

North America Europe & CIS Latin America Lessors Middle-East Asia Pacific Africa

8% 8% 25% 42% 8% 7% 13% 17% 16% 23% 1% 3%

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SLIDE 11

STEADY RAMP-UP IN A ROBUST COMMERCIAL ENVIRONMENT

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Backlog O&D

1.1 0.3 1.5 1.7 2.8 1.8 3.0 1.6 0.5 1.1 2.7 1.4 2.4 2.3 1.7 1.1 2.6 1.3 3.4 3.3 1.1 2.0 4.3 1.7 1.5 3.8 0.9 2.1

Book-to-bill Cancellations* (%)

Growing backlog while ramping-up deliveries to meet customer demand

0.9 1.1

320 378 434 453 483 498 510 534 588 626 629 635 688 718 800

200 400 600 800 1,000 1,200 1,400 1,600 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Backlog Deliveries Net orders Average net order [2004-2018]

* Cancellations (excluding conversions) / backlog

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SLIDE 12

HELICOPTERS: MARKET AND PRODUCT POSITIONING

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Demand impacted by softness in O&G LT market potential: ~ 22k new h/c in next 20 years UAM new market MARKET Military market supported by growing Defence budgets Successful campaigns in 2018 Product renewal strategy: H135, H145, H160, H175 Wide mission coverage PRODUCT Unique product offering addressing wide range

  • f missions and classes

Military offers based on proven Civil technology

MILITARY AIRCRAFT CIVIL & PARAPUBLIC

Renewed product portfolio and global market presence

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SLIDE 13

DEFENCE AND SPACE: MARKET AND PRODUCT POSITIONING

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Strengthening core product portfolio and expanding the smart-digital services business

CIS* SPACE SYSTEMS UAS*

Geopolitical instability leading to increased security needs Defence spending at all time high with further growth expected Defence investment cycles to kick-start in European markets MARKET Space spending on the rise Dynamic shift of space market (new space economy, constellations, exploration) Future ambitions of national space agencies and ESA National sovereignty demands digital solutions, secured connectivity and cyber protection Security and information as a service Disruptive business driven by AI, Big Data and Advanced Analytics Strong need for investment and promising growth potential New multi-national European collaborative programme Services verticals will offer increasingly interesting prospects MALE Intelligence, Surveillance & Reconnaissance needs (European Male) Solar powered High Altitude Pseudo Satellite (Zephyr) UAS turnkey service solution Urban Air Mobility Strategic Air Mobility, Tactical and Multi-Mission Military Aircraft Evolution of Combat Air Systems (Future Combat Air Systems) Expanding services business with focus on digitalisation Telecommunications, Earth Observation, Navigation and Science Satellites Constellations (e.g. OneWeb) Manned and unmanned space systems for orbital infrastructure On-Orbit Services Solutions PRODUCTS Develop and scale digital services and solutions Cyber Security (Stormshield) Intelligence (C5ISR, Pléiades Neo & OneAtlas) Secure Connectivity (Network For The Sky)

MILITARY AIRCRAFT

*CIS: Communication, Intelligence and Security *UAS: Unmanned Aerial Systems

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SLIDE 14

LEVERAGING DIGITAL IN ALL AREAS OF OUR BUSINESS

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Generating new business opportunities Improving reliability of assets in use for customer benefit Driving further industrial efficiency Data exploitation Connectivity Skywise

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SLIDE 15

Market Demand Product Positioning H1 2019 Review

H1 2019 ROADSHOW PRESENTATION

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KEY PROGRAMME UPDATE

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  • Programme fully consolidated into Airbus since July 1st 2018
  • 78 aircraft now in operation. Customer interest confirmed with 95 firm orders and

commitments at Le Bourget

  • Focusing on commercial momentum, production ramp-up and cost reduction
  • Backlog of 5,800+ aircraft supports our ramp-up. Preparing for rate 63 in 2021
  • Continuing to study potential further rate increases beyond 2021
  • ACF ramp up in H2’19 remains challenging
  • Progressing on Neo transition– working closely with engine partner and suppliers to

deliver in line with customer commitments

  • A330-800 flight test campaigns progressing
  • Rate 10 reached in Q4’18 – stabilising production at current rates including -1000 ramp-up
  • A350 breakeven targeted in 2019. Continuing our journey toward cost convergence.
  • Progressing on Programme wind-down and securing in-service support for the next

decades

  • Continuing with development activities as agreed in the revised capability roadmap
  • Retrofit activities advancing in line with customer agreed plan
  • Contract Amendment signed with OCCAR. Anticipated impact reflected in FY’18 results.

A220 A320 A330 A350 A380 A400M

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SLIDE 17

H1 2019 FINANCIAL PERFORMANCE

17 Revenues

in € bn

EBIT Adjusted

in € bn / RoS (%)

(1) H1 2019 Average number of shares: 776,291,117 compared to 774,129,413 in H1 2018 Capitalised R&D: € 45 m in H1 2019 and € 40 m in H1 2018 H1 2019 figures include A220, consolidated into Commercial Aircraft as of July 1st, 2018

EPS(1) Adjusted

in €

FCF before M&A and Customer Financing

in € bn

25.0 30.9

H1 2018 H1 2019

1.2 2.5 4.7% 8.2%

H1 2018 H1 2019

(4.0) (4.0)

H1 2018 H1 2019

0.96 2.25

H1 2018 H1 2019

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H1 2019 PROFITABILITY

18 EBIT Performance

in € bn

(1) H1 2019 Average number of shares: 776,291,117 compared to 774,129,413 in H1 2018 Capitalised R&D: € 45 m in H1 2019 and € 40 m in H1 2018 H1 2019 figures include A220, consolidated into Commercial Aircraft as of July 1st, 2018

EPS(1) Performance

in €

H1 2019 EBIT Reported of € 2.1 bn H1 2019 EBIT Adjustments resulting from: H1 2019 Net Adjustments of € − 436 m H1 2019 Net Income of € 1,197 m H1 2019 Net Income Adjusted of € 1,750 m H1 2019 tax rate on core business is 27% € – 208 m Defence export ban € – 136 m A380 programme cost € – 90 m Others € – 2 m PDP mismatch / BS revaluation

1.16 1.12 2.53 2.09 EBIT Adjusted EBIT Reported H1 2018 H1 2019 0.96 0.64 2.25 1.54 EPS Adjusted EPS Reported H1 2018 H1 2019

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SLIDE 19

CURRENCY HEDGE POLICY

19 In H1 2019, $ 19.6 bn(1) of new Forwards were added at an average rate of € 1 = $ 1.22 $ 13.1 bn(1) of hedges matured at an average rate of € 1 = $ 1.27 Hedge portfolio(1) 30 June 2019 at $ 87.4 bn (vs. $ 81.9 bn in Dec. 2018), at an average rate of $ 1.23(2) In H1, $ 4.1 bn of hedges rolled-over intra-year to align with backloaded delivery profile

IN $ BILLION

Forward Sales as of June 2019 Collars as of June 2019 Forward Sales and Collars as of Dec. 2018

Approximately 60% of Airbus US$ revenues are naturally hedged by US$ procurement. Graph shows US$ Forward Sales and Collars Hedge rates reflect EBIT impact of the US$ hedge portfolio (1) Total hedge amount contains $/€ and $/£ designated hedges; (2) Blended Forwards and Collars rate includes Collars at least favourable rate

Average hedge rates

2019

remaining 6 months

2020 2021 2022 2023

and beyond

€ vs $

Forwards/Collars (2)

1.19

( 1.23 in Dec. 18 )

1.23

( 1.23 in Dec. 18 )

1.24

( 1.24 in Dec. 18 )

1.25

( 1.27 in Dec. 18 )

1.26

( 1.30 in Dec. 18 )

£ vs $ 1.40 1.37 1.36 1.35 1.40

Mark-to-market value incl. in AOCI = € - 1.9 bn Closing rate @ 1.14 € vs. $

14.7 22.3 20.0 15.0 9.9 13.1 3.9 1.7

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SLIDE 20

13.3 6.6

Net Cash position Dec. 2018 IFRS 16 Implementation Gross Cash Flow from Operations Change in Working Capital Cash used for investing activities before M&A M&A Shareholder Return Pensions & Others Net Cash Position June 2019

  • 6.1
  • 1.3
  • 0.7
  • 0.1

0.0 2.8

H1 2019 CASH EVOLUTION

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IN € BILLION Free Cash Flow before M&A : € - 4.0 bn t/o Customer Financing: € 0.0 bn

(1) Thereof Capex of € – 0.9 bn (2) M&A transactions include acquisitions and disposals of subsidiaries and businesses (3) Excludes M&A of € – 0.1 bn (4) Includes change in liability for puttable instruments of € + 0.2 bn

(1)

Free Cash Flow before M&A and Customer Financing € - 4.0 bn

IFRS 16 implemented January 1st, 2019

  • 1.4

(2) (3) (4)

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SLIDE 21

2019 GUIDANCE

Airbus targets 880 to 890 commercial aircraft deliveries in 2019 On that basis: Airbus expects to deliver an increase in EBIT Adjusted of approximately +15% compared to 2018 and FCF before M&A and Customer Financing of approximately € 4 bn

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As the basis for its 2019 guidance, Airbus expects the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions Airbus 2019 Earnings and FCF guidance is before M&A

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KEY PRIORITIES

Deliver on 2019 commitments Ramp-up A320 Improve A350 margins Improve programme execution across businesses Services, Digital and Innovation

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Deliver Earnings and FCF growth potential

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SLIDE 23

Investment in Digital & Innovation

DELIVER EPS & FCF GROWTH POTENTIAL

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Boost Competitiveness A350 Turning Profitable A320neo Volume & Price

EPS Growth Future Growth Potential

2018 - 2021

A320 Higher Rate potential A350 Margin improvement A400M* EPS Growth Working Capital Control

FCF Growth

2021+

Boost Competitiveness

  • * A400M will continue to weigh until 2021.
  • * * A220 will continue to weigh until 2021. Partnership funding arrangement not included in FCF

Box sizes for illustration purpose only

A220**